Macro Roundup (Aug 15)

SHANGHAI, Aug 15 (SMM) – This is a roundup of global macroeconomic news last night and what is expected today.

Last night

The US dollar index hit the highest level since June last year at 96.794 on Tuesday while the euro fell to a 13-month low against the greenback and Swiss franc, as traders fretted over the exposure of European banks to Turkey, whose currency rebounded from an all-time low.

Both LME and SHFE base metals fell across the board overnight. LME copper, lead, tin dropped over 1%, nickel slid 0.81%, zinc lost 0.69%, and aluminium edged down 0.5%. SHFE copper shed 1.5%, zinc and nickel dropped over 1%, aluminium inched down 0.37%, tin slipped 0.19% and lead dipped 0.16%.

China's industrial output expanded 6% year on year in July, flat from growth in June, according to the National Bureau of Statistics (NBS). In the first seven months of the year, industrial output increased 6.6% year on year, 0.1 percentage points lower than the January-June period.

China's fixed asset investment rose 5.5% year on year in the first seven months of the year, down from 6% for January-June, data showed Tuesday.

Investment in infrastructure grew 5.7% in the first seven months, down from 7.3% for the first half of the year. Private sector fixed asset investment rose 8.8% in January-July, compared with an increase of 8.4% in the first half. Private investment accounted for about 60% of overall investment in China.

China’s retail sales rose 8.8% in July from a year earlier, below an expected 9.1% and down from 9% in June.

Germany’s gross domestic product (GDP) rose 0.5% quarter on quarter in April-June, beating economists’ consensus forecast of 0.4%. The quarterly growth rate for the first three months of the year was also revised up to 0.4% from 0.3%.

On the year, the German economy grew by 2% in the June quarter, while economists had expected a 2.1% expansion. Consumer inflation remained at 2.1% on the year in July.

The ZEW research institute said that its monthly survey showed economic sentiment among German investors improved to -13.7 in August from -24.7 in July, compared with the forecast for a reading of -20.7. A separate gauge measuring investors’ assessment of the economy’s current conditions edged up to 72.6 in August from 72.4 in the previous month.

US import prices stood flat in July as a surge in the cost of fuels was offset by weak prices elsewhere, suggesting that a strong dollar kept imported inflation in check.

The American Petroleum Institute (API) reported an unexpected buildup of 3.66 million barrels of US crude oil inventories for the week ended August 10. The API reported a draw of 6 million barrels of crude oil in the previous week. Inventories at the Cushing, Oklahoma site increased by 1.64 million barrels on the week.

API gasoline inventories for the week lost 1.56 million barrels after it gained 3.11 million barrels a week ago. Distillate inventories increased by 1.94 million barrels after an increase of 1.76 million barrels a week ago.

Day ahead

Key things to watch today include US industrial output and retail sales in July as well as weekly crude oil inventory data from the Energy Information Administration (EIA).